The American housing slump is showing no signs of abating with the number of homeowners facing foreclosure more than doubling in the second quarter of the year.

RealtyTrac, the provider of foreclosure information, said yesterday that the number of homes that had received a foreclosure-related noticed had more than doubled to 739,714 in the quarter and that banks repossessed 222,000 homes.

Across the US one household in every 171 received a foreclosure notice during the three-month period. A foreclosure-related notice covers such situations as borrowers falling more than a month behind on mortgage repayments, repossessions and forced auctions. Nevada, California, Florida and Arizona had the highest foreclosure rates, with Stockton, in California, having one household in every 25 either seriously at risk of losing their home or having been evicted. In Nevada one household in every 43 received a foreclosure filing in the period.

Generally a bank takes six months to repossess a home and evict owners after a default on repayments.

The housing slump is worsening because a number of homeowners took out adjustable-rate mortgages, on which the cost of borrowing was initially very low but rose during the loan period. Many borrowers, already under pressure from increasing food and fuel costs, have been unable to keep pace with rising mortgage rates.

About 1.5million homeowners entered the foreclosure process last year, a figure that Wall Street economists expect to rise to 2.5 million this year.

Economists drew some comfort from new-home sales data, which showed the decline is slowing. In the second quarter the total of new homes sold fell by 3,000 to 530,000 The American housing slump is showing no signs of abating with the number of homeowners facing foreclosure more than doubling in the second quarter of the year — well above gloomier forecasts of 503,000. Annualised new-home sales fell by a rate of 17.1 per cent, much less than the 44.9 per cent annualised drop during the first quarter. A report also showed modest recovery in consumer sentiment as Americans began to spend tax rebates made as part of Washington's $168 billion stimulus package.

The Reuters/University of Michigan Surveys of Consumers reported that a final July reading of its index of confidence was 61.2, up from 56.4 in June.

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